Cash surplus for goldminers

Citi says free cash-flow generation from goldminers is poised to accelerate over the next two years. “This cash bonanza is driven by the fruition of years of investment, which has seen several projects commissioned in 2012, and more to come in 2013. The looming surplus cash position is likely to serve as a catalyst for the next phase of production growth and fund further sector consolidation. Our most favoured names for gold exposure are
OceanaGold
and
Beadell Resources
." The broker notes gold equities continue to underperform gold. Citi also says despite its picks,
Newcrest Mining
and
Regis Resources
are safer – if fully valued – options.

It says the other key trend in gold stocks is the divide between Newcrest and the other ASX gold stocks, which leaves a lot of room for mid-cap stocks to “grow into the void", like Regis Resources.